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Car accident settlements can be extremely complicated to negotiate. In many cases, insurers have policies in place designed to confuse policy-holders and award the minimum amount possible. Even a good insurer may disagree with your claims of how much they owe or should pay in a car accident settlement. Sometimes, mediation or arbitration are the best options for settling your car accident claim. Mediation and arbitration are typically faster than filing a lawsuit, and can produce more immediate, binding results.

What’s the Difference Between Arbitration and Mediation?

Arbitration and mediation are both forms of alternative dispute resolution, and attempt to settle things like car accident claims without filing litigation. Mediation is more of a facilitation type of process. The impartial third-party mediator will help both sides discuss and negotiate on relevant issues until they reach an agreement.

Arbitration, on the other hand, is when an impartial third-party has the power to make a binding decision about the facts. Both sides present their cases, and the arbitrator makes a decision about whose case is valid and how much to award. Arbitration is typically binding, meaning neither party can appeal or seek alternative resolution once an arbitrator has ruled.

When to Settle Your Car Accident, and When to Pursue Arbitration or Mediation

Settling a car accident is typically the preferred avenue for resolving car accident claims. It saves the expense of a mediator or arbitrator, and is the easiest way to reach an agreement. However, if you and your insurer can’t agree, a mediation or arbitration may be preferable to filing a lawsuit.

Choose mediation if you and your insurer agree on the basic facts, but disagree about a few points, or the value of the claim. Mediation can help you come to an agreement. Choose arbitration if you and your insurer disagree on fundamental facts, or can’t reach an agreement about value. If you can’t disagree on fundamental facts, the negotiation style of mediation is insufficient to help you resolve the issue. An arbitrator can make the decision for you without going through a long, drawn-out court case.